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Regulated Entities

Packer

Buys livestock for slaughter, manufactures or prepares meats or meat food products for sale or shipment, or markets meats, meat food products, or livestock products in an unmanufactured form acting as a wholesale broker, dealer, or distributor

Bonded Packers Listing

Note: These lists include certain regulated entities subject to the Packers and Stockyards Act - those that are required to maintain a bond (market agencies, dealers, and packers) and those subject to the statutory trust provisions (bonded packers and live poultry dealers). The lists and bond amounts are current as of the date listed on the linked file. Once you open a file you can use the "Find" option under the "Edit" menu to locate specific regulated entities. The listed business addresses are most often mailing addresses. Please contact a Packers and Stockyards Division (PSD) regional office with any questions concerning these lists.

Packer Responsibilities

The following are some basic responsibilities for packers. Please refer to the Packers and Stockyards Act, 1921, as Amended and Supplemented, and the Regulations issued there under, for a complete list of legal responsibilities.

Bonds

Every packer whose annual livestock purchases equal or exceed $500,000 must execute and maintain a reasonable bond, as a measure of protection for livestock sellers. Packers must file a clause 4 bond or bond equivalent. The size of the bond is based on the volume of business, generally an average of two days business with a minimum bond of $10,000. Packers whose annual livestock purchases are below $500,000 are not required to be bonded.

Prompt Payment

Each packer purchasing livestock must deliver to the seller the full amount of the purchase price. Payment for livestock is due before the close of the next business day following the purchase and transfer of possession.

Mailing Checks in Payment for Livestock Purchased for Slaughter, for Cash and Not on Credit

PSD recognizes that one who sells livestock to a packer, market agency, or dealer, who is purchasing for slaughter, may not intend to be present at the point of transfer of possession of the livestock, to receive payment, at the time a check in payment for such livestock may be delivered by the purchaser, and may not wish to authorize a representative to receive such a check; or for other reasons such a seller may prefer that such a purchaser make payment by mailing a check within the time limit as prescribed in section 409(a) of the Act. In cases when the seller does not intend to be present, he may use the following form of notification to the purchaser:

I do not intend to be present at the point of transfer of possession of livestock sold by me to (name of packer, market agency, or dealer) for the purpose of receiving a check in payment for such livestock.

I hereby direct (name of packer, market agency, or dealer) to make payment for livestock purchased from me, by mailing a check for the full amount of the purchase price before the close of the next business day following the purchase of livestock and transfer of possession thereof or, in the case of a purchase on a “carcass” or “grade and yield” basis, not later than the close of the first business day following determination of the purchase price.

This does not constitute an extension of credit to (name of packer, market agency or dealer). This is subject to cancellation by me at any time, and if not cancelled by (date), it shall terminate on that date.

If the seller, for reasons other than not being present to receive payment, prefers to have the packer, market agency, or dealer make payment by mailing a check within the time limit as provided in section 409(a), he may use the above form but should not include the statement in the first sentence that he does not intend to be present.

PSD believes that such an agreement would not constitute an extension of credit within the meaning of section 206 of the Act because it would not give the purchaser any more time to issue a check than is provided in section 409(a).

Scales

All scales used by those subject to the Act to weigh livestock, livestock carcasses, or feed for the purposes of purchase, sale, acquisition, payment, or settlement, must be installed, maintained, and operated to ensure accurate weights, in accordance with the applicable requirements in the National Institute of Standards
and Technology (NIST) Handbook 44, "Specifications, Tolerances, and Other Technical Requirements for Weighing and Measuring Devices." All such scales must be tested for accuracy by a competent agency at least twice during each calendar year-once between January 1 and June 30 and once between July 1 and December 31. You must
have a minimum of 120 days between these two tests. Except that if you use such scales on a limited seasonal basis (during any continuous 8-month period) for purposes of purchase, sale, acquisition, payment or settlement, you may use such scales within
an 8-month period following each test. The certification form must be filed with the regional PSD office. Such scales must be equipped with a printing device which will record weight values on a scale ticket or other document. Any scale known to be inaccurate may not be used.

Weighing

Only competent, trained weigh masters should weigh livestock. All weigh masters must read and sign an Acknowledgment Form certifying that they have read the Instructions for Weighing Livestock or Poultry. The weighmaster should ensure that the scale will provide accurate weights prior to weighing. The weigh
master should keep the scale balanced at zero at all times; check the zero balance every 15 minutes or 15 drafts, and after every draft of more than half the scale capacity; record the time of zero balance check; and weigh each draft of livestock to the nearest scale division. The weighmaster should favor neither the buyer nor
the seller; print a scale ticket only while livestock is on scale and scale has settled; complete the scale ticket; allow persons having a legitimate interest in a draft of livestock to observe the weighing; and reweigh a draft of livestock immediately if requested.

Packer Trusts

If a packer fails to pay for livestock, the receivables, inventories, and proceeds derived from such purchases in cash sales become trust assets by operation of law. The packer must hold these assets for the benefit of all unpaid cash sellers. Cash sellers are legally in priority payment position in
bankruptcy or in claims against trust assets in the event of a business failure. Refer to the prompt payment section; any seller that extends credit to a packer will lose all rights under the Trust Provisions.

Unfair Practices

It is unlawful for any packer to engage in or use any unfair, unjustly discriminatory, or deceptive practice or device.

Records

Every packer must keep the accounts, records, and memoranda necessary to fully and correctly disclose all transactions involved in his/her business. This includes true ownership of the business. The records must by maintained for two full years, or longer if instructed by the Administrator.

Annual Reports

Every packer must file an annual report with PSD. Each packer will complete and file form P&SP-3004 on a yearly basis.

Inspection of Business Records and Facilities

Each packer, upon proper request, must permit authorized representatives of the Secretary of Agriculture to enter its place of business during normal business hours and to examine records pertaining to its business subject to the Act.

Meat Packers – Sales and Purchase Contract Complaints.

From time to time PSD receives complaints concerning the failure or refusal of buyers to pay the full purchase price for, or to accept delivery of, their purchases of meat and meat food products and sellers failing to meet contractual specifications. Most such complaints arise out of disputes concerning condition, grade, weight, or shipping instructions. For further information, click here.

Arbitration

Production contracts that require the use of arbitration must include specific language on the signature page that allows the swine production contract grower or livestock producer to decline arbitration. See
regulation 201.218 for the mandatory language.

When determining if the arbitration process provided in a contract provides a meaningful opportunity for the swine production contract grower or livestock producers to participate fully in the arbitration process, the criteria the Secretary of Agriculture may consider includes, but is not limited to, whether:

any limitations on legal rights and remedies in such a manner as to allow the swine production contract grower or livestock producer to make an informed decision on whether to elect arbitration for dispute resolution.

Provisions in the entire arbitration process governing the costs and time limits are reasonable.

The swine production contract grower or livestock producer is provided access to and opportunity to engage in reasonable discovery of information held by the packer.

Arbitration is required to be used to resolve only disputes relevant to the contractual obligations of the parties.

A reasoned, written opinion based on applicable law, legal principles and precedent for the award is required to be provided to the parties. (1)

The following two criteria only apply to packers who also operate as swine contractors:

Additional Capital Investments Criteria. When determining whether a requirement of additional capital investments over the life of a swine production contract constitutes a violation of the P&S Act, the criteria the Secretary of Agriculture may consider includes, but is not limited to, whether:

A packer failed to give a swine production contract grower discretion to decide against the additional capital investment requirement.

The additional capital investment is the result of coercion, retaliation or threats of coercion or retaliation by the packer.

The packer intends or does substantially reduce or end operations at the slaughter plant or processing facility or intends or does substantially reduce or end production operations within 12 months of requiring the additional capital investment, absent the occurrence of a catastrophic or natural disaster, or other emergency, such as unforeseen bankruptcy;

The packer required some swine production contract growers to make additional capital investments, but did not require other similarly situated swine production contract growers to make the same additional capital investments.

The age and number of recent upgrades to, or capital investments in, the swine production contract grower’`s operations.

The cost of the required additional capital investments can reasonably be expected to be recouped by the swine production contract grower.

A reasonable time period to implement the required additional capital investments is provided to the swine production contract grower.

Equipment changes are required with respect to equipment previously approved and accepted by the packer, if existing equipment is functioning as it was intended to function, unless the packer provides adequate compensation incentives to the swine production contract grower. (1)

Reasonable Period to Remedy Breach of Contract. When determining if a packer has provided a reasonable period of time for a swine grower to remedy a breach of contract that could lead to termination of a production contract, the criteria the Secretary of Agriculture may consider includes, but is not limited to, whether:

The packer provided written notice of the breach of contract to the swine production contract grower upon initial discovery of that breach of contract if the packer intends to take an adverse action, including termination of a contract, against the swine production contract grower based on that breach of contract by the swine production contract grower.

The notice includes:

A description of the act or omission believed to constitute a breach of contract, including identification of the section of the contract believed to have been breached;

The date of the breach;

The means by which the swine production contract grower can satisfactorily remedy the breach, if possible, based on the nature of the breach; and

A date that provides a reasonable time, based on the nature of the breach, by which the breach must be remedied.

The packer took into account the swine production contract grower’s ongoing responsibilities related to the raising and handling of the swine under their care when establishing the date by which a breach should be remedied.

The swine production contract grower was afforded adequate time from the date of the notice of the alleged breach to rebut the allegation of a breach. (1)

Note: These criteria do not limit a packer`s rights under a contract or agreement where food safety or animal welfare is concerned.

End Notes

(1) The regulations in this part, when governing or affecting contracts, shall apply to any livestock contract entered into, amended, altered, modified, renewed or extended after February 7, 2012.